Economy Watch: ADP Says Sandy Put Dint in Hiring
Automatic Data Processing, which prepares hiring numbers in cooperation with Moody's Analytics every month, said that the U.S. private sector created 118,000 jobs in November, a drop from the 157,000 the company reported in October.
By Dees Stribling, Contributing Editor
Automatic Data Processing, which prepares hiring numbers in cooperation with Moody’s Analytics every month, said on Wednesday that the U.S. private sector created 118,000 jobs in November, a drop from the 157,000 the company reported in October. ADP’s numbers often don’t synch with the official government numbers later this week, though at other times they offer a reasonably accurate advance look at the official count.
October was an unusual month. Mark Zandi, chief economist of Moody’s Analytics, said in a press statement that “Superstorm Sandy wreaked havoc on the job market in November, slicing an estimated 86,000 jobs from payrolls. The manufacturing, retailing, leisure and hospitality, and temporary help industries were hit particularly hard by the storm.”
But the storm was, in terms of its impact on job creation, a freak event. Zandi added that apart form the storm, the job market turned in a surprisingly good performance during the month. “This is especially impressive given the uncertainty created by the presidential election and the fast-approaching fiscal cliff,” he explained. “Businesses appear to be holding firm on their hiring and firing decisions.”
Non-manufacturing sector ekes out growth
The Institute for Supply Management reported on Wednesday that economic activity in the U.S. non-manufacturing sector grew in November for the 35th consecutive month, with its non-manufacturing index registering 54.7 percent in November, 0.5 percentage points higher than October’s 54.2 percent. Not much of an improvement, but an improvement all the same.
According to the ISM, 11 non-manufacturing industries reported growth in November. Respondents’ comments to the survey were mixed, however. The majority of survey respondents voiced a cautious optimism about current economic conditions.
The organization’s Non-Manufacturing Business Activity Index was 61.2 percent, up 5.8 percentage points month-over-month, and its New Orders Index increased by 3.3 percentage points to 58.1 percent. The Employment Index, on the other hand, was down by 4.6 percentage points to 50.3 percent, indicating growth in employment for the fourth consecutive month—it’s still over 50 percent, but barely. The Prices Index decreased 8.6 percentage points to 57 percent, meaning prices increased at a slower rate in November when compared to October.
U.S. to ramp up energy production
Domestic energy production is predicted to continue to rise, according to the preliminary findings of the U.S. Energy Information Agency’s Annual Energy Outlook 2013, which was released on Wednesday. The country uses about 20 percent more energy in all forms than in produces now; by 2040, that gap will be less than 10 percent, because of a variety of factors, including increasing production, but also tighter efficiency standards.
“The advent of continuing improvements of advanced oil production technology, particularly for shale, and other tight formations, continues to lift tight supply,” Adam Sieminski, administrator for the U.S. EIA, noted in a press statement. Natural gas will see the largest increase in production, according to the report, allowing the country to be a net exporter of it by the end of this decade.
Wall Street was in a bit of a “What, Me Worry?” mood about the fiscal cliff and other matters on Wednesday, with the Dow Jones Industrial Average up 82.71 points, or 0.64 percent. The S&P 500 gained 0.16 percent, but the Nasdaq dropped 0.77 percent, with Apple leading the way down, off nearly 5 percent.